Factoring & Invoice Discounting
14/07/1989
Query
Retail shop sells stock to Factor with right to buy back after period of two months. Can this be considered to come within the provisions of Section 3 (5) (b) (i) of the VAT Act "transfer of ownership of goods as security for a loan or debt".
Decision
It was agreed by Revenue that the transaction in this case came within the terms of Section 3 (5) (b) (i) on the understanding that if the Factor disposed of the goods to any person other than the supplier of the stock that it would be required to account for VAT on such supply
Value Added Tax
Section 3 (5)(b)(i), Value Added Tax Act, 1972
Origin: Indirect Taxes Policy and Legislation
File ref:A/58